Is renting unreasonable if I'm paying $875/mo? Should I consider buying in the near future?

I live in the closeby Philadelphia suburbs and I love my apartment, however, I pay $875/mo. for just a 1bedroom. Although my apartment is nice and I am happy here, I do not like the idea that I am paying all this rent and it is not going into any kind of collateral or investment. Plus, I do not get the tax benefits that I would if I were paying on a mortgage.

To all the Philly/NJ people: Do you think that $875/mo. is unreasonable for a single person in a 1bedroom? Also, is it possible to buy a small house(2bedroom rowhouse) with mortgage/homeowners insurance/property taxes totalling about the same amount that I pay for rent?

Right now, I do not have money for a down payment. But I'm looking at buying within the next year hopefully. My credit is solid(except I'd like to pay down 2 of my credit card balances). By the way, I'm 24yrs old(young). Do you think "buying" is a smarter decision than "renting" for me? Just curious what people think about this situation.

To Rena T: I don't live in an expensive urban area like center city. I live in Bucks County, the suburb directly Northeast of Philly(next to Jersey). If I buy, I'm strongly considering Bristol Borough, because there's a lot of Victorian rowhomes there, and the neighborhood is cheap right now but prices will be going up(gentrification, town renovations, etc). My rent is one of the more expensive rents in my town(#2 most expensive; #1 most expensive is a complex owned by the same management as mine! lol). I would go to a cheaper place, but the deposit I'd have to pay wouldn't make it worth it, esp if I'm looking to buy within the next 1-2yrs.

$800/mo for center Philly is very reasonable! My friend sublets down there for $1000/mo. and even $1000/mo. is cheap for that these days!

I know the Temple area...in my less lavish days, I paid around the same amount for a studio in that area, but mine was further up(25th & Lehigh area)...Temple area is nicer than where I stayed :)

I grew up in Jersey, went to college in Philly (where I rented for four years) and now live in NYC, where rents and cost of living are so horrible, everyone's running back to Jersey to live!

Back when I was in school, my rent was $475 for a studio apartment with utilities included. Granted this was near Temple U. and was over three years ago. I did sublet a GREAT apartment on 12th and Walnut in Philly over five years ago where the rentor paid over $800/mth. I think $875 may be reasonable. Check the paper for listings in your area and see if they are comparable.

As for renting vs. buying, if I lived in that area still, I would definitely buy, depending on what I made for a living. Houses/condos are so much cheaper there than they are here. It's a buyer's market, so that would help you at the negotiating table. You're absolutely right, it's much better to INVEST your money than to help someone else pay their mortgage.

A home is a investment. Its always better to own then rent. However dont get yourself onto trouble. I'm not sure how the housing market is there but in California 875 for a 2bedroom is great.

thats way too much for one person
I sure would look around
also there are repo deals and deals where you assume someones mtge.....check out doublewides and def save some money

I'm not from your area --but buying is always better than renting. If you can buy, I say go for it.

Comparing to the San Francisco Bay Area --you have a geat deal on rent.

Work with a mortgage broker to see how much house you can afford. Don't let them push you into anything, however, just find out what price ranges you could afford then look at the properties in that range. Buying is preferable to renting for many people... but there are other factors to consider.

Do you plan on staying in Phila. for a few years? Is the real estate market there stagnant or worse? or is it appreciating? Have you thought of buying a two unit home and renting the other to help cover your expenses? Do you have a trusted advisor (parent, friend or otherwise) to help you through decisions you are making for the first time?

Try speaking to friends who have bought or with older siblings who have - or with your parents who I assume have owned homes in the past.

Good luck.

I am not from there. Unless you can buy a place for under about 70k renting is much less expensive for you. It would be hard to find a mortgage payment for that amount.